On January 1, 2021, the new German Act on the Stabilization and Restructuring Framework for Businesses (Unternehmensstabilisierungs- und -restrukturierungsgesetz – StaRUG) came into force in an effort to implement the Directive (EU) 2019/1023 of the European Parliament and of the Council of June 20, 2019 on preventive restructuring frameworks. The new legislation provides a variety of new tools for distressed companies to restructure well before they are required to file for insolvency. The key instrument of the newly introduced “German Scheme” is the restructuring plan, which allows for a (financial) restructuring of the debtor on a majority vote basis, comparable to Schemes of Arrangement, a restructuring tool now completing the German pre- and post-filing restructuring toolbox. This will significantly facilitate restructurings in Germany and is therefore of great importance to almost all stakeholders of distressed companies.
For further and more in-depth information, in particular on the restructuring plan but also on the other tools provided by the “German Scheme,” please refer to this presentation.